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Did Rice Come Away Empty-Handed From Saudi Arabia?; Who's in Charge in Cuba?

Aired August 1, 2007 - 19:00   ET


Happening now, billions worth of weapons in exchange for vague promises, did Secretary of State Condoleezza Rice come away empty- handed from Saudi Arabia?

And who is in charge of Cuba? Raul Castro took over from his ailing brother but every time he seems to speak of reform, Fidel Castro reins him back in.

And there may be huge reserves of oil beneath the North Pole. Is the U.S. falling behind Russia in the race to claim it?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

She came bearing gifts, an offer of some $20 billion worth of weapons but critics say Secretary of State Condoleezza Rice came away with very little from her visit to Saudi Arabia. Let's go to our State Department correspondent Zain Verjee -- Zain.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, even good friends don't always see eye to eye.


VERJEE (voice-over): All smiles for the camera, but beneath them, few results.

CONDOLEEZZA RICE, SECRETARY OF STATE: We are allies. We've been so for decades. It doesn't mean that there won't be disagreements about policy, tactics from time to time.

VERJEE: Secretary of State Condoleezza Rice came to the kingdom dangling a multibillion dollar arms deal hoping for more support on Iraq and the Israeli/Palestinian conflict. But all she left with were denials and vague promises. The Saudi foreign minister says he is astounded by charges from U.S. officials his country is undermining the Iraqi government and even backing the Sunni insurgency.

PRINCE SAUD AL-FAISAL, SAUDI FOREIGN MINISTER: The kingdom is keen on achieving peace in Iraq and maintaining its unity and stability.

VERJEE: Secretary Rice also wants the Saudis to sit face to face with Israel at a Mideast peace conference in the fall, even though it doesn't recognize the Jewish state; Saudi Arabia's response, maybe, only if talks are serious and not superficial.

AL-FAISAL: We'll look very closely and hard at attending it.

UNIDENTIFIED MALE: Saudi Arabia is not our friend.

VERJEE: Angry U.S. lawmakers charge Saudi Arabia is not serious about fighting terrorism or helping the U.S. in Iraq and doesn't really deserve a sweet arms deal. One furious Democrat says it's less about U.S. interests and more about personal business relationships.

REP. CHARLES RANGEL (D), NEW YORK: There's one thing that Cheney, Bush (inaudible) and Saudi Arabia has in common is three things -- oil, oil and more oil.


VERJEE: One thing the U.S. did get, Saudi Arabia says it will explore opening up an embassy in Baghdad. That's something the U.S. has been pushing for -- Wolf.

BLITZER: Zain thanks very much -- Zain Verjee reporting.

It's truly a staggering figure. More than $1 trillion, that's a thousand billion dollars, a report that has just come out says that's what it's going to cost the United States to fight these wars in Iraq and Afghanistan, these wars will be very, very costly, in fact, they already are, all of these funds, of course, coming out of our taxpayer dollars.

Let's go straight to our White House correspondent Ed Henry. He is watching this story for us. A trillion dollars to fight the wars in Iraq and Afghanistan, most of it of course already being spent on the war in Iraq.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf, it's a massive sum of money no matter how you slice it especially when you consider the fact that Larry Lindsey, the president's chief economic adviser was fired for having the temerity several years ago to predict that the war in Iraq would cost up to $200 billion.


HENRY (voice-over): To portray the president as a fiscal conservative, spokesman Tony Snow says the White House will not give in to Democratic demands for an extra $22 billion in the federal budget.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: For most Americans 22 billion is a pretty considerable chunk of change.

HENRY: Try multiplying that $22 billion by 45. That's how much the war on terror is now projected to cost, $1 trillion. In a new report, the nonpartisan Congressional Budget Office says the wars in Iraq and Afghanistan have already cost $602 billion.

And the report conservatively estimates the wars will cost at least another $481 billion. And maybe even more if U.S. troops stay in Iraq for a longer period bringing the total tab to above $1 trillion.

SNOW: Well, if you take a look at what happened on September 11, 2001 it's estimated that the aftershocks of that could have cost up to $1 trillion and we understand there is a real commitment in the war on terror but also you have to think of what the countervailing costs are.


HENRY: Now, I asked Tony Snow for a reasonable estimate on what the total tab will be. He said he can't do that because war is not easy. You can't come up with a tidy assumption but of course it was a former Pentagon official, Paul Wolfowitz who had a tidy assumption back in March of 2003. He testified to Congress that oil revenue in Iraq would pay for the whole war and U.S. taxpayers would not have to be used. That was way, way wrong, Wolf.

BLITZER: By about a trillion dollars, but that was then and this is now.

Let's make the turn to Karl Rove. The president of the United States has just decided he's going to exert executive privilege and not allow his top political adviser to testify before Congress.

HENRY: That's right, Wolf. In this two-page letter from Fred Fielding, the White House counsel, to Senators Leahy and Specter, CNN obtained it first and it basically raises the stakes in this constitutional showdown with Congress over the U.S. attorney matter. What Fred Fielding, the counsel, says is that the president has decided to assert executive privilege and not turn over any documents or provide testimony from both Karl Rove, his most senior adviser and J. Scott Jennings, the deputy political director.

As you know, they have already asserted this privilege with two other more junior aides but this raises the stakes big time. You're talking about the president's most senior, most loyal adviser Karl Rove, Democrats are likely to take this to the courts, Wolf.

BLITZER: All right, thank you very much, Ed Henry reporting from the White House.

The return of Donald Rumsfeld, almost nine months after he was forced out of office, the former defense secretary who is taking heat once again today. A congressional committee wants to know what the Bush administration knew about the death of former football player Pat Tillman, shot by fellow troops in Afghanistan. Let's go to our Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, it was the same Don Rumsfeld, certain about what he knows and what he doesn't know.


STARR (voice-over): It was vintage Donald Rumsfeld back on Capitol Hill for the first time since resigning as defense secretary. Knowing some accuse him and others of covering up the friendly-fire death of Corporal Pat Tillman, the NFL football star, turned Army Ranger.

DONALD RUMSFELD, FORMER DEFENSE SECRETARY: I would not engage in a cover-up. I know that no one in the White House suggested such a thing to me. I know that the gentlemen sitting next to me are men of enormous integrity and would not participate in something like that.

STARR: Tillman was shot during a confusing firefight in Afghanistan in April 2004, almost immediately his fellow soldiers knew it was friendly fire. A classified memo was circulated within days warning top commanders, but family members were not told for weeks. Rumsfeld said he could not remember exactly when he learned Tillman was a victim of friendly fire.

RUMSFELD: I don't remember. I don't recall when I was told. I don't recall who told me. I have a vague recollection.

STARR: One presidential candidate challenged the secretary who is known for never backing down.

DENNIS KUCINICH (D), OHIO: Because you actually covered up the Tillman case for awhile. You covered up the Jessica lynch case. You covered up Abu Ghraib.

RUMSFELD: So you have nothing to base that on. You have not a scrap of evidence or a piece of paper or a witness that would attest to that.


STARR: But at the end of the hearing, many committee members were still unsatisfied. Wanting to know who will be held responsible for not telling the Tillman family about what happened in a timely manner -- Wolf.

BLITZER: Barbara Starr at the Pentagon.

Meanwhile, here in Washington, the embattled attorney general is concerned about any notion he lied to or misled lawmakers in recent testimony. We've now obtained a letter Alberto Gonzales wrote to Democratic Senator Patrick Leahy. In it Gonzales tells the Senate Judiciary Committee chairman he's determined to try to address the oppression he made misleading statements under oath.

At issue, Gonzales' July 24th testimony about the administration's anti-terrorist activities, Gonzales' letter tries to clarify some points from that testimony. It says the Department of Justice can answer other questions in classified briefings.

Jack Cafferty is watching all of this unfold in New York for "The Cafferty File". You're shaking your head, Jack.

JACK CAFFERTY, CNN ANCHOR: Classified briefing, I don't remember, executive privilege. Seventy-seven U.S. troops were killed in Iraq in July. The good news is that's the lowest number of Americans to die any month this year. The bad news is we lost 77 of our young men and women in Iraq's messy, bloody civil war.

Meanwhile, Michael Mullen, the Navy admiral who is nominated to become chairman of the Joint Chiefs of Staff is saying that despite everything our military is doing over there, they're going to fail unless the Iraqi government does more to bridge sectarian issues. Those leaders probably didn't hear what Mullen had to say because the Iraqi government's on vacation for a month.

Not that you'd notice, the difference between when they're at work and when they're on vacation is hardly noticeable. There's no oil sharing agreement, no attempt to tribal reconciliation, no negotiations over power sharing, nothing, virtually none of the things that have been asked of this government have been accomplished.

It is also hard to get much of anything done in fairness to them when you have groups within the government who walk out the door whenever they feel like it. First, it was Muqtada al-Sadr's bloc who boycotted the parliament for five weeks. Today the largest Sunni Arab bloc withdrew its members from the government, so there is no government.

They're saying that Prime Minister Nuri al-Maliki has refused to respond to their demands. And the prime minister is apparently facing a revolt from within his own party from factions who simply want him out. So here's the question.

What should be done about the dysfunctional Iraqi government? E-mail your thoughts to or go to It just ain't working, Wolf.

BLITZER: And some of his aides, Nuri al-Maliki's aides are leaking stories that they don't really like General David Petraeus because he's trying to encourage Sunni leaders to work together against the insurgents and they may want to see him recalled. You know what they would call that in New York?

CAFFERTY: What would they call that?

BLITZER: What would they call it? Chutzpah?

CAFFERTY: Hey, there's a word.


CAFFERTY: You got it.

BLITZER: All right. Jack thanks very much.

Fidel Castro speaks out. He says the country is marching on without him. Does it mean he has no intention of coming back to power any time soon? We'll take you to Havana to find out what's really going on.

Plus, Barack Obama promises to strike Pakistan if necessary. Does tough talk on foreign policy today, does it put him on the same page as President Bush?

And there's a race for oil in the North Pole. The Russians try to plant their flag in the Arctic, the new rush for black gold.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Who's in charge of Cuba? Would it be Castro or would it be Castro or would it be both? They're keeping Cubans and the U.S. government guessing. CNN's Morgan Neill is our man in Havana -- Morgan.

MORGAN NEILL, CNN CORRESPONDENT: Wolf, the man making the speeches in Cuba these days is Raul Castro, not Fidel, but the man they know as the commander in chief is still making his voice heard.



NEILL (voice-over): It's been a year since Fidel Castro officially handed leadership of Cuba over to his brother Raul, but the question of just who is running the country is as unclear as ever. In Wednesday's papers Fidel Castro writes he's being harassed by questions about when he'll return to power, but he gives no hint as to when or even if that could happen.


NEILL: In the last year writes the elder Castro his brother Raul has consulted with him on every important decision during his recovery.


NEILL: Cuba's leaders constantly emphasize the government's unity but at least one difference has emerged, on the possibility of future talks with the U.S.


NEILL: This was Raul Castro last week.


NEILL: If the new U.S. authorities were to finally put their arrogance aside and decide to talk in a civilized way, he says, it would be a welcome change. And then in Wednesday's papers Fidel Castro writes...

"No one should entertain the slightest illusion that the empire, which carries the seeds of its own destruction, will negotiate with Cuba."

In the streets of Havana nobody seemed entirely sure who is in charge.


NEILL: I read in the paper that it is Raul, says Orlando (ph), but when he has a problem he gets help from Fidel. Asked if Fidel will return to power this man says...


NEILL: He is in power. He never left power. But when asked who is running the government, he responds...



NEILL: This retiree says she doesn't think Fidel is in any shape to run things but she adds...


NEILL: Nobody knows anything here.


NEILL: Now, why is it so important just who is calling the shots? Well, to give you just one reason some analysts believe that Raul Castro would like to make some significant reforms but that his brother is reining him in -- Wolf.

BLITZER: Morgan Neill reporting from Havana. From Havana, let's go all the way out to the other part of Cuba, Guantanamo Bay.

What happens to terror suspects freed from U.S. custody at Guantanamo? Do they go on to build new productive peaceful lives or do they go back to their old ways? CNN's Brian Todd is joining us with some new information you're getting. Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, information on the fate of former detainees is often murky, in many cases it's not clear what happened to them, but we're also told some have made their way onto the battlefield.


TODD (voice-over): A startling claim by the Pentagon, at least 30 former detainees have taken part in anti-coalition militant activities since being transferred out of the detention facility at Guantanamo Bay, Cuba. An example, Abdullah Massoud described as a militant leader linked to the Taliban and al Qaeda. U.S. officials say he recently blew himself up as Pakistani police closed in on him near the border with Afghanistan. The Pentagon official who gave us the information on Massoud and the other ex-detainees would not go on camera but referred us to an analyst who they briefed. LT. COL. ROBERT MAGINNIS, U.S. ARMY (RET.): It would appear that those that they've identified are very militant; they do want to continue the war on terror. They are serious jihadists which have the intent of killing as many Americans and Westerners as they possibly can.

TODD: But in an e-mail to CNN the Pentagon official said the Defense Department does not generally track detainees after they've left Guantanamo. When we asked for proof of militant activities, the official said he could not give specifics, did not want to compromise sources and methods, but said the information came from intelligence sources and other reports. CNN analyst Peter Bergen says there is a problem with former detainees returning to the battlefield but he has this perspective.

PETER BERGEN, CNN TERRORISM ANALYST: Of all the people that have been released so far, something like seven percent have returned to the battlefield. Now is it -- were they radicalized inside Guantanamo. If I was held in Guantanamo, I might you know have a pretty unfavorable view of the United States.


TODD: A Pentagon official counters that most of those let go were radicalized to begin with, including one who was identified as a deputy Taliban defense minister before he was sent to Guantanamo. So why did they let all these men out? Pentagon officials say while at Guantanamo these detainees constantly lied to them about who they were, Wolf.

BLITZER: What a story, Brian. Thanks very much. Brian Todd reporting for us.

Check your child's toys -- Elmo, Big Bird, Dora the Explorer, there's a massive recall from Fisher-Price. This is a story that's just coming in from The Associated Press. We're about to give you details.

Also, brain damage breakthrough, a man speaks and eats for the first time in six years. Thanks to experimental electrodes. This is an amazing medical story that's just coming in. You're going to want to see it.

Also, a Democratic congressman calls President Bush a clown and says he can't stand him. It's all caught on tape.

Stay with us. You're in THE SITUATION ROOM.



BLITZER: There is a massive toy recall that has just been announced. It involves a lot of toys coming into the United States from China. Let's go to Carol Costello. She is watching this story for us. A lot of people who have children or grandchildren are going to be nervous when they hear this.

CAROL COSTELLO, CNN ANCHOR: You can bet that's very true, Wolf. This is a huge worldwide recall involving 967,000 or more toys. This is all according to The Associated Press. This recall is by Fisher- Price. It includes products, Big Bird, Elmo, Dora the Explorer, Diego characters because their paint contains excessive amounts of lead and guess where that paint was made and applied, in China.

Now, this applies to toys sold in the United States between May and August. You are to keep toys by Fisher-Price, you know, I mentioned some of those characters, if you bought them between May and August, you are going to keep them away from your children because they could be dangerous and you are asked by Fisher-Price's general manager to call the company and apparently they'll have instructions on what you can do with those toys on the call.

Now, this problem was detected, Wolf, by an internal probe. We don't know all the details but there was some kind of internal probe at Fisher-Price that found this problem. Apparently Fisher-Price has dealt with this vendor from China for a very long time but something suspicious must have popped up to prompt this probe and they found excessive lead in paint on characters -- on their toys, Elmo, Dora the Explorer, Diego and more so if you purchased any toys, Fisher-Price painted between May and August I'd keep them away from your kids.

BLITZER: You know these toys are so popular, they seem to be all over the place, Elmo and these other characters, people are going to be worried about what to do, but what you're saying is that you be -- the instructions they're getting from Fisher-Price is, what, to go to their Web site or call them and to determine what they do with these actual toys?

COSTELLO: Yes, I'm going to try to get a phone number or something but Fisher-Price says to call the company if you purchased these toys between May and August. And apparently they'll have some kind of recording that you can listen to that will instruct you on what to do but the important thing is, is if you bought these toys, if you suspect you have toys that are painted with this paint from China and you purchased between May and August it's best to keep them away from your kids.

BLITZER: You know, I venture to say that so many -- I don't know what percentage -- but so many of the toys that are out there in the United States are, in fact, made in China. This is the latest in a series of imports from China that have caused a lot of problems here in the United States whether food or fish or manufactured problems, products now toys, this is going to cause a huge uproar, Carol.

COSTELLO: You keep hearing that China is trying to solve these problems. I mean they have arrested high executives and they even jailed one and I think the punishment was execution, but these stories still are coming out of China and now you're right, toys -- food, toys, other products. You know you have to wonder what is next.

BLITZER: Carol I know you're checking this information. You're going to stay on top of it. Thanks very much for bringing it to our viewers out there. We'll update you with more information on this recall as soon as we get it.

Meanwhile, a Democratic congressman is stirring controversy for calling President Bush a clown. More -- now the video has actually been posted online. Let's go to our Internet reporter Abbi Tatton. Who is the congressman who is lashing out at the president, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it was Congressman Earl Pomeroy, Democrat of North Dakota, who was flagged down on the streets of Washington, D.C. last week while on a phone call and asked repeatedly about impeaching the president. His response videotaped. Listen carefully.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) don't want to impeach this clown.

TATTON: The people I represent don't want to impeach this clown he said referring to President Bush. The women pursue him for 90 seconds or so after which the visibly agitated congressman is seen leaving finishing his phone call. It was shot by an anti-war group, WHYNot News, and posted on the site Grassroots America.

This might seem familiar; the same group confronted Democratic Congressman David Obey in March and posted that heated exchange online also. A spokesperson for Congressman Pomeroy said that he was distracted at the time on a call about the farm bill which is important to North Dakotans. She went on to say the congressman certainly has disagreements with the president, but it was a poor choice of words -- Wolf.

BLITZER: Thanks for that, Abbi Tatton reporting.

Barack Obama talking tough on terror, he says he would indeed strike Pakistan if needed. Will today's foreign policy push by the senator be enough to backpack some critics, critics who have been calling him naive on foreign policy?

And Amtrak offers free booze to lure in high-end riders.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, blood flows in the streets of Baghdad. Two bomb attacks terrorize the city, leaving at least 70 people dead today. Additionally, the U.S. military reports four U.S. soldiers died in two incidents yesterday.

GM, Ford and Chrysler see their sales plunge worse than expected for July. This allowed import brands to overtake the automakers for the very first time.

BLITZER: And Amtrak is now offering, get this, $100 in free alcohol to some customers on overnight trains. The company is trying to promote a high-end new service it has been testing. That service could cost you more than $700. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

A man who hopes to be president of the United States has a warning for the president of Pakistan, Senator Barack Obama says Pakistan must stop terrorists operating in that country or risk facing some serious consequences. Let's bring in our senior political correspondent Candy Crowley.

This happening, this speech by Senator Obama after Senator Clinton, his main rival, suggested he was naive when it comes to foreign policy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Right. You know, the Obama campaign called this a comprehensive speech on terrorism, but anyone looking for the next chapter in that Clinton/Obama spat over diplomacy will be vaguely disappointed.


CROWLEY (voice-over): In a muscular speech on the war against terrorism, presidential candidate Barack Obama promised U. S.-led assaults into Pakistan if necessary.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: There are terrorists holed up in those mountains who murdered 3,000 Americans. If we have actionable intelligence about high-value terrorist targets and President Musharraf will not act, we will.

CROWLEY: In the rarest of moments, this puts Obama basically in sync with the Bush administration and Hillary Clinton, interviewed on Urban Radio.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: ... if we had actionable intelligence that Osama bin Laden or other high- value targets were in Pakistan, I would ensure that they were targeted and killed or captured.

CROWLEY: Obama's speech was aimed at establishing tough-on- terrorism credentials, after a couple of rocky debate answers which critics found weak and meandering.

It also follows a week in which he and Clinton had a nasty little clash over his statement that, as president, he would meet with leaders of nation like Iran and Cuba and North Korea. Clinton called Obama naive and irresponsible, saying there should be lower-level diplomacy first, to avoid being used for propaganda.

No names mentioned today, but Obama returned to the subject.

OBAMA: It's time to turn the page on Washington's conventional wisdom that agreement must be reached before you meet, that talking to other countries is some kind of reward and that presidents can only meet with people who will tell them what they want to hear.

CROWLEY: The Obama campaign declined to call anything in the speech an attack on Clinton. Obviously, said an aide, there are some differences here. This would include his continued discussion on congressional authorization of the war in Iraq, a vote in which Clinton was among the ayes.

OBAMA: With that vote, Congress became co-author of a catastrophic war.

CROWLEY: Obama's speech outlined a series of five diplomatic and military steps to redirect the war on terror, including taking the fight out of Iraq and putting it in Afghanistan and Pakistan.


CROWLEY: The Biden campaign called Obama a johnny-come-lately to positions Biden has long held. The Edwards people took the occasion to call on Obama and Clinton to block the arms deal with Saudi Arabia. But beyond Clinton's statement on Pakistan, her campaign had no comment. You don't need to get into it when you're sitting on a substantial double-digit lead in the national polls.

BLITZER: And I want to show our viewers some of the new poll numbers just coming in, Candy. There is a brand-new NBC News/Wall Street Journal poll that has just come out. It shows Hillary Clinton actually widening her lead over Senator Barack Obama. Take a look at those numbers, 43 percent for Clinton, 22 for Obama. It also shows Rudy Giuliani well ahead on the Republican side, 33 percent for him, Fred Thompson, not an official candidate yet, down to 20 percent.

But take a look at this, Candy, in the poll Clinton beats Giuliani in a head-to-head matchup, and Barack Obama beats Giuliani also in a head-to-head clash. These numbers are very early, but they're indicative of a trend we've seen going on for some time.

CROWLEY: Absolutely. I mean, Hillary Clinton has held her lead for a very long time and she keeps widening it. It isn't so much that Obama is going down. It's that she's going up. So this is obviously very good news to her. They've run basically a pretty flawless campaign at this point. No major mistakes.

Obama has had some problems getting his footing on some of the issues, particularly foreign policy, so it's perhaps not surprising but it's a pretty darned big lead.

BLITZER: Candy, thanks very much.